The Australian - The Deal - - Briefing -


the im­por­tance of a good fit. The former sales­man of ladies hosiery and swimwear was the youngest dis­trib­u­tor of Levi’s jeans in West­ern Aus­tralia at the ageof 20inthe 1960s, bas­inghis success on of­fer­ing a higher level of per­sonal ser­vice than his com­peti­tors.

How­ever, it wasn’t long be­fore Sat­ter­ley fig­ured out that he could make riches out of those rags by in­vest­ing his weekly Levi’s com­mis­sion in lo­cal real es­tate. Within 40 years, the Sat­ter­ley Prop­erty Group be­came the coun­try’s largest pri­vately owned res­i­den­tial land de­vel­oper. It has built more than 150 es­tates and sold more than 50,000 home sites in WA.

“I bought my first block of land [four hectares] in 1968 and made $10,000 when I sold it 10 months later,” says Sat­ter­ley, who was made a Mem­ber of the Or­der of Aus­tralia in 2006. “That was a profit equiv­a­lent to the cost of two houses in those days.”

Shortly af­ter that very prof­itable first pur­chase, Sat­ter­ley crossed paths with a man who would play a piv­otal role in his ca­reer. “I met Sir James McCusker [fa­ther of WA gov­er­nor Mal­colm McCusker]. Sir James and Mal­colm founded the Town and Coun­try Build­ing So­ci­ety, and it was Sir James who sug­gested that I con­cen­trate on real es­tate full time.”

The re­sult was Sat­ter­ley’s first prop­erty com­pany, States­man Homes, which be­gan se­cur­ing land through­out Perth and its en­vi­rons. “I be­gan with $25,000 in cap­i­tal, buy­ing va­cant lots and trad­ing land. My first dis­play home­was in Duncraig in 1970, the sec­ond was in Park­wood in 1971.”

By 1975, States­man­Homes was sell­ing 600 dwellings a year and soon be­came the state’s largest home builder. The rise in Perth’s pop­u­la­tion – from about 300,000 in the late 1960s to nudg­ing 1.9 mil­lion to­day – has nat­u­rally worked in Sat­ter­ley’s favour.

By 1980, he was ready to sell his in­ter­est in States­man Homes and con­cen­trate on feed­ing the newde­mand for CBDa­part­ments. “At the same time, I be­came a kind of real es­tate ‘ doc­tor’ for vic­tims of the 1980 prop­erty down­turn, fin­ish­ing de­vel­op­ments in com­mer­cial build­ings on be­half of banks and re­ceivers.”

A cou­ple of years later, Sat­ter­ley sug­gested to Sir James that the Town and Coun­try Build­ing So­ci­ety con­sider mov­ing into the land devel­op­ment busi­ness, as there was an op­por­tu­nity to take a strong lead­er­ship role in the sec­tor.

The first ac­qui­si­tion – 45 hectares in­Leem­ing for $3.5 mil­lion, with roomfor 400 lots – proved a great success. The group went on to ac­quire land in the new sub­urb of Mur­doch. It also formed a joint ven­ture with the WADepart­ment of Hous­ing at Alexan­der Heights and snapped up 100 hectares in Maranga­roo. “That was the first pri­vate-sec­tor land devel­op­ment on the east­ern side of Wan­neroo Road to be com­mer­cially suc­cess­ful,” Sat­ter­ley says.

Sat­ter­ley de­vel­op­ments have won many awards (more than 80 to date). His blue­print for a suc­cess­ful com­mu­nity is sim­ple: Give peo­ple what they want, what they can af­ford and a bet­ter place to live. “We iden­ti­fied early on that in many cases it was women who were the de­ci­sion mak­ers when it came to buy­ing a prop­erty, so we made a virtue of pro­vid­ing schools, col­leges, parks, shop­ping ar­eas and a com­mu­nity build­ing.”

Sat­ter­ley views down­turns such as the global fi­nan­cial cri­sis as op­por­tu­ni­ties, rather than as oc­ca­sions for re­trench­ment and gloom. “In 1987, dur­ing the stock­mar­ket crash, we ac­quired Halls Head in Man­durah – which turned out to be a great deal be­cause 12 months later we had zero debt and 6500 750- square-me­tre res­i­den­tial blocks on the books at no cost.”

He has had many other great deals with sales to match (in one year, 650 lots were sold in the group’s Brighton devel­op­ment), all based on op­er­at­ing in a “very dili­gent, very care­ful, thor­ough­way”.

“In 1982, Sir James and I devel­oped a risk-man­age­ment strat­egy that we still ap­ply to­day. The banks like us be­cause of our low gear­ing, our well-man­aged projects and our ap­proach to ac­quir­ing op­por­tu­ni­ties in a sen­si­ble way de­spite a gen­er­ally de­pressed mar­ket. I be­lieve you can al­ways sell well-lo­cated land, no mat­ter what the mar­ket is do­ing.” In busi­ness terms, Sat­ter­ley would rate 2012 “six out of 10” and an­tic­i­pates a 5 per cent pick-up in 2013. “There is plenty of com­pe­ti­tion and con­sumer con­fi­dence is slowly pick­ing up.”

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